Level 1 “other debt securities” primarily refer to Italian government bonds, either fixed-rate and very short-term bonds or floating-rate and medium-term ones.

These securities have been mainly used for short-/very short-term repurchase agreements with banks, on the MTS platform or on the Eurosystem.

Level 3 equity instruments refer to non-controlling interests considered strategic for the Bank, including a 3 million Euro interest that was measured at cost, as allowed by IAS 39.

4.2 Available for sale financial assets: breakdown by debtor/issuer

Type/Amounts

31.12.2014

31.12.2013

1. Debt securities

229.868

2.515.810

a) Governments and Central banks

229.355

2.490.380

b) Other public entities

-

-

c) Banks

513

25.430

d) Other issuers

-

-

2. Equity instruments

13.457

13.369

a) Banks

9.798

10.316

b) Other issuers

3.659

3.053

- insurance companies

-

-

- financial institutions

3.087

3.049

- non-financial companies

572

4

- others

-

-

3. O.E.I.C. units

-

-

4. Loans

-

-

a) Governments and Central banks

-

-

b) Other public entities

-

-

c) Banks

-

-

d) Other issuers

-

-

Total

243.325

2.529.179

4.4 Available for sale financial assets: annual changes

Debt securities

Equity instruments

O.E.I.C. units

Loans

Total31.12.2014

A. Opening balance

2.515.810

13.369

-

-

2.529.179

B. Increases

25.761

606

-

-

26.367

B1. Purchases

-

-

-

-

-

B2. Fair value gains

46

-

-

-

46

B3. Reversal on impairment losses

-

-

-

-

-

- through profit or loss

-

X

-

-

-

- equity-accounted

-

-

-

-

-

B4. Transfers from other portfolios

-

-

-

-

-

B5. Other changes

25.715

606

-

-

26.321

C. Reductions

2.311.703

518

-

-

2.312.221

C1. Sales

-

518

-

-

518

C2. Redemptions

2.275.000

-

-

-

2.275.000

C3. Fair value losses

12.383

-

-

-

12.383

C4. Impairment losses

-

-

-

-

-

- through profit or loss

-

-

-

-

-

- equity-accounted

-

-

-

-

-

C5. Transfers to other portfolios

-

-

-

-

-

C6. Other changes

24.320

-

-

-

24.320

D. Closing balance

229.868

13.457

-

-

243.325

For debt securities, other increases refer to actual interests accrued during the period; other reductions refer to coupons earned.

For equity securities, other increases refer to the classification of equity instruments deriving from a restructured loan under AFSs. Sales refer to the disposal of shares in a credit institution; the relevant previously recorded valuation reserve was recognised in profit or loss with a 231 thousand Euro profit;

The fair value gains and losses refer to the valuation of securities recognised in equity.

Section 5 – Held to maturity financial assets – Item 50

5.1 Held to maturity financial assets: breakdown by type

Type/Amounts

31.12.2014

31.12.2013

Book value

Fair value

Book value

Fair value

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3

1. Debt securities

4.827.363

4.961.033

-

-

5.818.019

5.910.638

-

-

1.1 Structured

-

-

-

-

-

-

-

-

1.2 Others

4.827.363

4.961.033

-

-

5.818.019

5.910.638

-

-

2. Loans

-

-

-

-

-

-

-

-

Total

4.827.363

4.961.033

-

-

5.818.019

5.910.638

-

-

5.2 Held to maturity financial assets: breakdown by debtor/issuer

Type/Amounts

31.12.2014

31.12.2013

1. Debt securities

4.827.363

5.818.019

a) Governments and Central banks

4.827.363

5.818.019

b) Other public entities

-

-

c) Banks

-

-

d) Other issuers

-

-

2. Loans

-

-

a) Governments and Central banks

-

-

b) Other public entities

-

-

c) Banks

-

-

d) Other issuers

-

-

Total

4.827.363

5.818.019

Total fair value

4.961.033

5.910.638

The portfolio of held to maturity financial assets stood at 4.827,4 million Euro at the end of the period and consists of Italian government bonds with residual maturity at the time of purchase of over one year, in light of the ability and willingness to hold them until maturity.At the reporting date, securities recognised in this item included unrecognised net capital gains amounting to 133,7 million Euro before taxes. Such net capital gains were not recognised according to the amortised cost method applicable to this portfolio.

5.4 Held to maturity assets: annual changes

Debt securities

Loans

31.12.2014

A. Opening balance

5.818.019

-

5.818.019

B. Increases

351.820

-

351.820

B1. Purchases

231.947

-

231.947

B2. Write-backs

-

-

-

B3. Transfers from other portfolios

-

-

-

B4. Other changes

119.873

-

119.873

C. Reductions

1.342.476

-

1.342.476

C1. Sales

-

-

-

C2. Redemptions

1.250.000

-

1.250.000

C3. Write-downs

-

-

-

C4. Transfers to other portfolios

-

-

-

C5. Other changes

92.476

-

92.476

D. Closing balance

4.827.363

-

4.827.363

Other increases refer to actual interests, while other reductions refer to coupons earned.

Section 6 – Due from banks – Item 60

6.1 Due from banks: breakdown by type

Type/Amounts

31.12.2014

31.12.2013

BV

FV Level 1

FVLevel 2

FV Level 3

BV

FV Level 1

FVLevel 2

FV Level 3

A. Due from Central banks

18.516

18.516

34.110

34.110

1. Restricted deposits

-

X

X

X

-

X

X

X

2. Legal reserve

18.516

X

X

X

33.973

X

X

X

3. Repurchase agreements

-

X

X

X

-

X

X

X

4. Others

-

X

X

X

137

X

X

X

B. Due from banks

256.342

-

-

256.342

381.707

-

-

381.707

1. Loans

245.317

-

-

245.317

357.659

-

-

357.659

1.1 Current accounts and on demand deposits

106.552

X

X

X

265.625

X

X

X

1.2 Restricted deposits

138.765

X

X

X

87.962

X

X

X

1.3 Other loans:

-

X

X

X

4.072

X

X

X

- Repurchase agreements

-

X

X

X

4.072

X

X

X

- Finance leases

-

X

X

X

-

X

X

X

- Others

-

X

X

X

-

X

X

X

2. Debt securities

11.025

-

-

11.025

24.048

-

-

24.048

2.1 Structured

-

X

X

X

-

X

X

X

2.2 Others

11.025

X

X

X

24.048

X

X

X

Total

274.858

-

-

274.858

415.817

-

-

415.817

Other debt securities refer to bonds issued by banks which, given their characteristics, are classified under due from banks.

Lending financial resources to other credit institutions is not part of the Group’s core business, and it is largely related to maintaining levels of liquidity exceeding period-end maturities.

The fair value of receivables due from banks is in line with the relevant book value, considering the fact that interbank deposits and debt securities are short- or very short-term indexed-rate instruments.

Section 7 – Loans to customers – Item 70

7.1 Loans to customers: breakdown by type

Type/Amounts

31.12.2014

31.12.2013

Book value

Fair value

Book value

Fair value

Performing

Impaired

L1

L2

L3

Performing

Impaired

L1

L2

L3

Purchased

Others

Purchased

Others

Loans

2.566.242

135.460

112.628

-

-

2.920.547

2.005.880

128.444

162.609

-

-

2.380.199

1. Current accounts

85.079

7.873

19.938

X

X

X

92.710

9.333

27.884

X

X

X

2. Repurchase agreements

-

-

-

X

X

X

52.698

-

-

X

X

X

3. Loans/mortgages

-

2.896

287

X

X

X

1.861

3.171

353

X

X

X

4. Credit cards, personal loans and salary-backed loans

-

42.374

-

X

X

X

-

40.859

-

X

X

X

5. Finance leases

-

218

-

X

X

X

-

373

-

X

X

X

6. Factoring

2.181.631

-

79.640

X

X

X

1.655.845

-

124.255

X

X

X

7. Other loans

299.532

82.099

12.763

X

X

X

202.766

74.708

10.117

X

X

X

Debt securities

-

-

-

-

-

-

-

-

-

-

-

-

8 Structured

-

-

-

X

X

X

-

-

-

X

X

X

9 Others

-

-

-

X

X

X

-

-

-

X

X

X

Total

2.566.242

135.460

112.628

-

-

2.920.547

2.005.880

128.444

162.609

-

-

2.380.199

Impaired purchased loans mainly refer to the distressed retail loans of the DRL sector, whose business is by nature closely associated with recovering impaired assets. Therefore, loans in the DRL sector are recognised under bad or substandard loans. In particular, those loans maintain the same classification as that assigned by the invoice seller, provided the latter is subject to the same law as Banca IFIS: otherwise, if the Bank has not ascertained the debtor's state of insolvency, those loans are classified as substandard.Performing loans classified under “Other transactions” refer to tax receivables (119,4 million Euro) and the margin lending related to repurchase agreements on government bonds on the MTS platform (102,7 million Euro).

The buildings and land recognised under property, plant and equipment for functional use at the end of the year mainly include the important historical building Villa Marocco, located in Mestre (Venice) and housing Banca IFIS’s registered office, and the property in Mestre (Venice), where some of the Bank’s services were relocated.The book value of the above property, totalling 32,2 million Euro overall, has been confirmed by experts specialising in the appraisal of luxury property.The current head office of the NPL business area in Florence, which was acquired under a finance lease, was recognised at 4,0 million Euro.

12.2 Investment property: breakdown of assets measured at cost

Assets/amounts

31.12.2014

31.12.2013

Book Value

Fair value

Book Value

Fair value

L1

L2

L3

L1

L2

L3

1. Owned

720

-

-

926

720

-

-

926

a) Land

-

-

b) Buildings

720

926

720

-

-

926

2. Acquired under finance leases

-

-

-

-

-

-

-

-

a) Land

-

-

b) Buildings

-

-

Total

720

-

-

926

720

-

-

926

12.5 Property, plant and equipment for functional use: annual changes

Land

Buildings

Furnishings

Electronic systems

Others

Total31.12.2014

A. Gross opening balances

6.738

32.574

4.390

4.374

1.897

49.973

A.1 Total impairment losses

-

(1.716)

(3.605)

(3.540)

(1.095)

(9.956)

A.2 Net opening balance

6.738

30.858

785

834

802

40.017

B. Increases

-

10.431

157

1.021

331

11.940

B.1 Purchases

-

10.431

157

1.021

331

11.940

B.2 Capitalised improvement expenses

-

-

-

-

-

-

B.3 Reversals of impairment losses

-

-

-

-

-

-

B.4 Fair value gains taken to:

-

-

-

-

-

-

a) Equity

-

-

-

-

-

-

b) Income statement

-

-

-

-

-

-

B.5 Exchange gains

-

-

-

-

-

-

B.6 Transfers from investment property

-

-

-

-

-

-

B.7 Other increases

-

-

-

-

-

-

C. Reductions

-

(760)

(306)

(609)

(320)

(1.995)

C.1 Sales

-

(510)

-

-

(89)

(599)

C.2 Depreciation

-

(250)

(306)

(609)

(231)

(1.396)

C.3 Impairment losses taken to:

-

-

-

-

-

-

a) Equity

-

-

-

-

-

-

b) Income statement

-

-

-

-

-

-

C.4 Fair value losses taken to:

-

-

-

-

-

-

a) Equity

-

-

-

-

-

-

b) Income statement

-

-

-

-

-

-

C.5 Exchange losses

-

-

-

-

-

-

C.6 Transfers to

-

-

-

-

-

-

a) Investment property

-

-

-

-

-

-

b) Assets under disposal

-

-

-

-

-

-

C.7 Other reductions

-

-

-

-

-

-

D. Net closing balance

6.738

40.529

636

1.246

813

49.962

D.1 Total net impairment losses

-

1.853

3.910

4.107

1.161

11.031

D.2 Gross closing balances

6.738

42.382

4.546

5.353

1.974

60.993

E. Measurement at cost

6.738

32.574

4.390

4.374

1.897

49.973

Property, plant and equipment for functional use are measured at cost and are depreciated on a straight-line basis over their useful life, with the exclusion of land with an indefinite useful life and the “Villa Marocco” property, whose residual value at the end of its useful life is expected to be higher than its book value.As for buildings, purchases refer to a property in Florence that will house the new headquarters of the NPL business area.Property, plant and equipment not yet brought into use at the reporting date are not depreciated.

12.6 Investment property: annual changes

31.12.2014

Land

Buildings

A. Gross opening balance

-

720

B. Increases

-

-

B.1 Purchases

-

-

B.2 Capitalised improvement expenses

-

-

B.3 Fair value gains:

-

-

B.4 Reversals of impairment losses

-

-

B.5 Exchange gains

-

-

B.6 Transfers from property for functional use

-

-

B.7 Other increases

-

-

C. Reductions

-

-

C.1 Sales

-

-

C.2 Depreciation

-

-

C.3 Fair value losses

-

-

C.4 Impairment losses

-

-

C.5 Exchange losses

-

-

C.6 Transfers to other asset portfolios:

-

-

a) Assets for functional use

-

-

b) Non-current assets under disposal

-

-

C.7 Other reductions

-

-

D. Closing balance

-

720

E. Measurement at fair value

-

-

Buildings held for investment purposes are measured at cost and refer to leased property. This property is not amortised as it is destined for sale.

Section 13 – Intangible assets – Item 130

13.1 Intangible assets: breakdown by asset type

Assets/amounts

31.12.2014

31.12.2013

Finite life

Indefinite life

Finite life

Indefinite life

A.1 Goodwill:

X

819

X

837

A.1.1 Attributable to owners of the parent company

X

819

X

837

A.1.2 Non-controlling interests

X

-

X

-

A.2 Other intangible assets

5.737

-

5.524

-

A.2.1 Assets measured at cost:

5.737

-

5.524

-

a) Internally generated intangible assets

-

-

-

-

b) Other assets

5.737

-

5.524

-

A.2.2 Assets measured at fair value:

-

-

-

-

a) Internally generated intangible assets

-

-

-

-

b) Other assets

-

-

-

-

Total

5.737

819

5.524

837

Goodwill, amounting to 819 thousand Euro, arises from the line-by-line consolidation of the Polish subsidiary IFIS Finance Sp. Z o. o.The above-mentioned goodwill was tested for impairment in accordance with IAS 36 (Impairment Test). To do so, goodwill was allocated to the cash-generating unit corresponding to the whole company IFIS Finance, as it represents an autonomous business segment that cannot be further broken down. The test was carried out by applying the value in use method based on the projection of expected cash flows for an explicit period of 5 years. Expected cash flows were discounted based on the company’s estimated cost of capital calculated using the Capital Asset Pricing Model. Expected cash flows were estimated based on the most recently approved business plan and financial projections based on the subsidiary’s average growth trends. The terminal value was calculated assuming that the last net cash flow in the explicit planning period is replicable. The impairment test did not reveal any impairment losses to be recognised in profit or loss.Finally, goodwill underwent a sensitivity analysis based on the cost of capital, using a fluctuation range equal to 5%; the test carried out with the control method confirmed the reliability of the recognised value.The change in the value of goodwill compared to the previous year is attributable to the impact of changes in year-end exchange rates.Other intangible assets at 31 December 2014 refer exclusively to software purchase and development, amortised on a straight-line basis over the estimated useful life, which is 5 years from deployment.

Deferred tax assets at 31 December 2014 refer for 36,5 million Euro to impairment losses on receivables that can be deducted in the next years.

14.2 Deferred tax liabilities: breakdown

The main types of deferred tax liabilities are shown below.

Deferred tax liabilities

31.12.2014

31.12.2013

Loans to customers

11.106

8.270

Available for sale securities

2.837

7.707

Property, plant and equipment and investment property

325

325

Others

-

38

Total

14.268

16.340

Deferred tax liabilities, amounting to 14,3 million Euro at 31 December 2014, refer for 6,1 million Euro to the fair value measurement of the tax receivables of the former subsidiary Fast Finance S.p.A., which was carried out at the time of the business combination, and for 2,8 million Euro to taxes on the valuation reserve for AFS securities held in the portfolio.

The decline in deferred tax liabilities recognised through equity compared to 31 December 2013 mainly refers to the latent gain related to the fair value measurement of the portfolio of available for sale financial assets following its reduction.

Section 16 – Other assets – Item 160

16.1 Other assets: breakdown

31.12.2014

31.12.2013

Tax receivables

13.952

2.688

Prepayments and accrued income

8.982

13.984

Guarantee deposits

7.624

664

Receivables from securitisation transactions

553

154.288

Other items

20.731

21.163

Total

51.842

192.787

Tax receivables refer for 5,7 million Euro to payments on account for the virtual stamp duty and for 7,9 million Euro to payments on account for withholding taxes on interest paid to customers, specifically on the rendimax savings account.

Prepayments and accrued income refer for 3,1 million Euro to interest on arrears due from the Public Administration and for 1,4 million Euro to prepaid interests in favour of customers with a fixed-term rendimax account.

Security deposits at 31 December 2014 refer for 7,1 million Euro to an escrow account held with the Italian Revenue Agency concerning a pending appeal in an outstanding tax dispute (as described in section 12 under liabilities, Provisions for risks and charges). The Bank voluntarily set up said account to allow the Fast Finance Business Area to collect tax receivables as usual; the Bank can simply request for it to be returned.

Receivables for securitisations represent the deferred consideration for the sale of receivables not yet paid to the special purpose vehicle. The notable decrease from the previous year was due to the end of the securitisation with IFIS Collection Services, a special purpose vehicle, in February 2014. The receivable corresponded to the funds available to the vehicle arising from the collections of receivables that have been resold and not yet paid to the originator, on the basis of the technical characteristics of the transaction.

Other items include a 10,6 million Euro receivable due from the parent company La Scogliera S.p.A. deriving from the tax consolidation regime, as payments on account were higher than the tax bill. They also include 4,8 million Euro in receivables due from customers for expenses to be recovered.